As media and communications industries enter the digital age, policy makers are confronted with unique new challenges to ensure competitive, consumer-friendly markets. Cable Mergers and Monopolies provides a detailed study of the increasingly concentrated cable TV industry, which has dominated the video market for decades and is rapidly gaining dominance in the high-speed Internet market.

This book presents a framework for understanding why the convergence of digital media and communications networks facilitates the exercise of two important new forms of market power. “Vertical” market power allows cable giants to leverage their monopoly over “wires” to dominate high-speed Internet service and exert control over the development of new, broadband Internet applications and content. Monopsony, or buyer power, allows cable operators who control hundreds of video channels to dictate the terms and conditions under which programming is made available to the public. For both video and highspeed Internet, the result is raised prices and retarded innovation.

The book combines the analytic concept of platforms (which has become prevalent in the analysis of the computer and communications industries) with traditional structure, conduct, and performance analyses from the field of industrial organization. The book also identifies innovative policies—beyond simply denying mergers—that federal, state, and local authorities can implement to prevent further abuse of consumers and other firms in the industry, and that can promote competition in digital information markets.

Dr. Cooper is the 2002-03 fellow at the Stanford Law School Center for Internet and Society and an associated fellow at the Columbia University Institute on Tele-Information. He has provided expert testimony in over 250 cases before state and federal agencies, courts, and legislators in almost four dozen jurisdictions in the United States and Canada. His published work includes numerous articles in trade and scholarly journals, including recent law review articles on digital society issues, and he is the author of two books, The Transformation of Egypt (1982) and Equity and Energy (1983).

The ECONOMIC POLICY INSTITUTE is a nonprofit, nonpartisan research organization that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy. The Institute stresses real world analysis and a concern for the living standards of working people, and it makes its findings accessible to the general public, the media, and policy makers. EPI’s books, studies, and popular education materials address important economic issues, analyze pressing problems facing the U.S. economy, and propose new policies.

Economic Policy Institute books are available in bookstores and at www.epinet.org.

ISBN: 1-932066-03-9

Download Cable Mergers and Monopolies: Market Power in Digital Media and Communications Networks

PDF format, 5.22MB, 186Pages.

MARK COOPER
Director of Research, Consumer Federation of America
Fellow, Stanford Center on the Internet and Society
Associated Fellow, Columbia Institute for Tele-information

Copyright © 2002 ECONOMIC POLICY INSTITUTE

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Today, despite a recent period of rapid growth in the U.S. economy, inequality in wealth, wages, and income remains historically high. Expanding global competition, changes in the nature of work, and rapid technological advances are altering economic reality. Yet many of our policies, attitudes, and institutions are based on assumptions that no longer reflect real world conditions.

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